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Yglesias

Farm Subsidies and Fine Print

Vicki Hartzler beat longtime Democratic Representative Ike Skelton in Missouri and at first glance appears to be delivering some much-needed Real Talk on farm subsidies:

The congresswoman-elect would exempt some of the federal budget’s high-cost categories — including Social Security, Medicare and the Pentagon budget — from cutbacks. But she would not exempt agricultural subsidies, another major area of federal spending popular in rural areas such as west-central Missouri’s Fourth District. Among the many farms to receive such subsidies is the 1,700-acre Hartzler farm, which — according to the Environmental Working Group’s “Farm Subsidy Database” — received about $774,000 in federal payments (mainly commodity subsidies for corn, soybeans and wheat) from 1995 through 2009.

“Everything should be on the table,” she says. While she says some agriculture programs represent a “national defense issue” because they help guarantee that “we have a safety net to make sure we have food security in our country,” Hartzler adds: “Should we continue the CRP [Conservation Reserve] program, where you pay farmers to not plant ground and set it aside for awhile? I’m not sure. The time for that may be over.”

That sounds decent, but as Sallie James observes when you peer into there’s much less here than meets the eye:

Let’s be clear about what Ms. Hartzler is talking about here. Those “some” agricultural programs she says should be guaranteed on “national defense” grounds (see below) are what we commonly think about as “farm subsidies” — payments to farmers to produce certain commodities, whether those payments are funded by taxpayers or consumers. They encourage overproduction and thus alienate our trade partners, complicate efforts to make global trade freer, harm poor farmers abroad and damage America’s reputation in the process. They cost us billions of dollars a year.

What she’s talking about cutting isn’t the main suite of farm price support programs. Instead she’s “open to cutting farm programs that at least pretend to have environmental benefits.” These programs aren’t my favorite idea about how to spend money, but paying land-owners to maintain their land in ecologically sound ways is much less pernicious than paying them to overproduce corn and soybeans. What’s more, it’s a much smaller share of the overall budgetary pie.

Climate Progress

The Next Steps For Advancing Biofuels Policy

Our guest blogger is Center for American Progress Agriculture Policy Director Jake Caldwell.

The Obama administration has been active in recent weeks on several significant advances in biofuels policy. Rural areas will increasingly become both the direct providers of renewable energy and the beneficiaries of a region-by-region clean energy transformation as an increasing number of sustainable biomass and biofuels energy facilities — and the jobs that accompany them — are sited in rural communities. Separately, the EPA announced that it is willing to approve higher blends of ethanol in newer vehicles to allow the use of 15 percent ethanol and 85 percent gasoline or E15 in our gas tanks. Many of these initiatives reflect and build upon earlier policy recommendations made by the Center for American Progress and others. They are steps in the right direction, but our biofuels policy still needs reform to maximize the economic and environmental benefits to the nation.

The combination of Congress’s RFS mandate to produce 36 billion gallons of biofuels by 2022, the recently announced USDA initiatives, and EPA’s boost in the ethanol blend to E15 for late-model cars and trucks should enable the current biofuels industry to support additional reforms needed in key aspects of biofuels policy:

– Further promotion of advanced biofuels that deliver measurable lifecycle greenhouse gas emissions reductions
– USDA should reinstate the lifecycle greenhouse gas emissions requirement for feedstocks seeking eligibility in the Biomass Crop Assistance Program
– Reform of the federal loan guarantee programs for the construction of biorefineries
– Boosting biofuel distribution infrastructure
Elimination of the current import tariff on imported biofuels
– A phase-out of the expiring blender’s credit in favor of a variable and performance-based producer tax credit

Biofuels that deliver measurable lifecycle greenhouse gas emissions reductions, minimize the use of food-based feedstocks, and reduce public health and environmental impacts should be encouraged. With the right policy in place we can maximize the benefits of biofuels, and ensure they contribute to greater economic growth, less pollution, and reduced oil dependence.

Read more at “Fine Tuning Our Biofuels Policy.”

Yglesias

The Other Non-Discretionary Spending

Sallie James observes that Republicans’ zeal for spending cuts doesn’t extend to cutting farm subsidies. She might have added that though people usually think of “entitlement” spending as meaning Social Security and Medicare, farm subsidies are another category of spending that would be left unmolested by a cap on “domestic discretionary spending.”

Basically the currently elderly, people living in rural areas, and people whose income depends on the military-industrial complex would all be protected from a drive that focuses specifically on domestic discretionary. Not coincidentally, these are many of the people inclined to vote Republican.

I think it’s important for progressives to get smarter about the fact that there’s really very little evidence for the proposition that there’s a debate in America about the merits of “small government.” There’s a conflict, instead, about whose interests the government should serve—a conflict whose basic contours you can learn a lot about by examining the demographics of each party’s core constituency.

Yglesias

What Price Cabbage?

I’ve been reading stories about the skyrocketing cost of kimchee—given by rising prices for napa cabbage—for a couple of weeks now. And I think it’s a sign of how screwy policies toward agricultural trade are that it’s only as of yesterday that “the government has suspended tariffs on imported cabbage and radishes from China.”

Of course the good people of South Korea might want to reconsider the whole idea of sales taxes on Chinese vegetables on a permanent basis. This is a regressive tax on the poorest South Koreans, it disadvantages super-poor Chinese farmers relative to their richer South Korean counterparts, it promotes an inefficient allocation of labor and land resources in South Korea, does nothing for public health, etc.

Meanwhile, though America’s sales taxes on foreign-grown food are lower than those prevailing in most of the developing world we’re not entirely free of this kind of bone-headed policymaking ourselves.

Climate Progress

Global Boiling: The Coming Food Crisis

Our guest bloggers are Center for American Progress CEO John Podesta and Agriculture Policy Director Jake Caldwell. The original, full version of this post appears at ForeignPolicy.com.

Pakistan starvingThere was already little margin for error in a world where, for the first time in history, 1 billion people are suffering from chronic hunger. But the fragility of world food markets has been underscored by the tragic events of this summer. The brutal wildfires and crippling drought in Russia are decimating wheat crops and prompting shortsighted export bans. The ongoing floods and widespread crop destruction in Pakistan are creating a massive humanitarian crisis that has left more than 1,600 dead and some 16 million homeless and hungry in a region vital to U.S. national security. These and other climate crises trigger widespread food-price volatility, disproportionately and relentlessly devastating the world’s poor. The spiking price of wheat is up 50 percent since early June.

Fortunately, there are signs we will likely avoid a repeat of the 2007-2008 food crisis, when prices jumped as much as 100 percent and led to deadly riots in Port-au-Prince and Mogadishu. This year, bumper crops in the United States, alongside replenished wheat stocks globally, may be adequate to offset shortages due to the fires in Russia. But these short-term measures should not lull us into complacency or a false sense of confidence. We still have neither a strategy nor a solution to ending global hunger.

In the short term, the United States must implement U.S. President Barack Obama’s promise to commit $3.5 billion to food security assistance. Since he made the pledge in 2009, only $812 million has been allocated. Surely the United States can do better, and at a faster pace. Emergency food aid is needed now to prevent famine and needless deaths in Niger, Mali, Chad, Burkina Faso, Mauritania, and northern Nigeria. Congress should increase U.S. contributions to the World Food Program and insist on accountability and reform in the distribution of more than $2 billion in annual U.S. food aid.

Looking beyond the immediate crisis, the United States and other developed countries must renew long-neglected investments in agriculture assistance across the developing world, targeting small farmers as the fundamental drivers of economic growth. While the United States provides more than half of the world’s food aid, agriculture assistance today stands at only 3.5 percent of overall U.S. development aid, down from 18 percent in 1979. We must also improve how this assistance is targeted. We can reap lasting results by focusing on soil and water conservation and improved crop varieties rather than carbon-intensive fertilizers. Scientific research and appropriate biotechnology can deliver significant crop yield gains and water savings if conducted in a safe and transparent manner. We also must invest in women, who represent up to 80 percent of the food producers in many developing countries, but frequently lack the support and services that will allow them to reinvest hard-earned agricultural gains into health and education for their families.

But lasting gains in agricultural productivity will require something more — action to confront climate change. Food shortages resulting from severe crop losses will occur more frequently and take longer to recover from as more people become vulnerable to extreme weather events like the droughts and flooding we see today in Russia and Pakistan. The World Bank predicts that developing countries will require $75 billion to $100 billion a year for the next 40 years to adapt to the effects of climate change on agricultural productivity, infrastructure, and disease.

This year, we may be able to limit the damage to a single supply shock in Russia and Eastern Europe. But even in the best of times, our global food system is stretched to the breaking point by the ever-present challenges of population growth, increased demand from changing diets, higher energy costs, and more extreme weather. Experts at the U.N. Food and Agriculture Organization estimate global agricultural productivity must double by 2050 to keep pace with increased demand. Unless we take immediate action, we are destined to race from food crisis to food crisis for generations to come, with grim consequences for the world’s poor and our own national security.

Yglesias

Do We Need a Department of Agriculture?

Devin McCullen reminds me that I once tweeted questioning the need for a Department of Agriculture and in response to pushback promised to blog on the topic at greater length. But then I never blogged on it at greater length.

Here’s the argument in brief. The USDA’s activities fall into four broad groups:

1) Things that have nothing to do with agriculture (USDA grad school).
2) Farm subsidization that we shouldn’t be doing.
3) Food safety stuff that could be merged with FDA.
4) Nutrion assistance stuff that could be done by HHS.

I would posit that locating programs aimed at 3) and 4) in a bureaucratic structure dominated by 2) winds up undermining their mission. Food producers, rather than food eaters or social service recipients, are the main “client” of the USDA in a way that compromises the priorities of some of its component agencies. The logo, for example, is meant to suggest amber waves of grain rather than poor children eating nutritious and safe food:

File:USDA logo 1

That said, I think the lesson of the Department of Homeland Security is that attempting to rearrange cabinet agencies can create a lot of problems and is probably more trouble than it’s worth. The real agenda here is to curb farm subsidies, which would be hard enough on its own terms.

Update

I’m reliably informed that the USDA Graduate School has already been divorced from the Department of Agriculture and for the past few years has just been “the Graduate School.”

Yglesias

Tea Parties and Farm Subsidies

Man and woman with stern expession stand side-by-side. The man hold a pitch fork

It would be nice to think that the Tea Partying and “anti-spending” mania sweeping the country might lead to renewed pressure to rethink farm subsidies, but as Donald Carr points out it doesn’t seem to be happening:

But right now, there seem to be plenty of Tea Party-favored candidates who willingly collect government assistance in the form of farm subsidies. In early April, the Washington Post reported that Stephen Fincher, a Tea Party Senate candidate from Tennessee, was facing criticism over his acceptance of farm subsidy payments, as is Indiana Senate candidate Marlin Stutzman. Michele Bachmann’s farm subsidies have opened her up to charges of hypocrisy for her limited government stands.

The situation is similar with members who flaunt their success at steering government money to their home states and districts. In March, at the height of the heath care debate, nine Republican senators sent President Obama a letter decrying his proposed cuts to lavish farm subsidy programs. The senators who signed the letter were Saxby Chambliss (Ga.), senior Republican on the Senate Agriculture Committee, Pat Roberts (Kan.), Thad Cochran (Miss.), John Thune (S.D.), James Risch (Idaho), Lindsey Graham (S.C.), Mike Crapo (Idaho), Kay Bailey Hutchison (Texas) and David Vitter (La).

As I’ve been saying, I think it’s necessary to get past the idea of pointing out “hypocrisy” here. It’s kind of like if a conservative was to say liberals say they like social justice, but really they favor policies that are wrong. “Social justice” is just a phrase, a slogan, something progressives like to talk about, but it doesn’t have any particular content. Similarly, for Tea Partiers “big government” means “stuff we don’t like” it’s not a governing agenda. It’s very common for countries to feature an urban-rural political cleavage. In some instances, the rural areas are more leftwing than the urban areas. But in places like the US where rural areas are more conservative, supporting rural interests is just constitutive of conservative ideology. It’s mistaken, but it’s not really hypocrisy.

Yglesias

The Sweet Stuff

Melanie Warner takes a look at growing consumer wariness of high-fructose corn syrup and how many firms are now moving back to making some products with real sugar to appeal to them even though it “costs some 40 percent more.”

Warner notes that scientific evidence that there are special HFCS-related health problems is actually a bit hard to come by, but from a policy point of view I think the key point is that the relative prices for these commodities are substantially impacted by hard-to-justify policy interventions. First off, there are severe restrictions on the ability of Latin American farmers to export sugar to the United States. Second, there are substantial monetary payments to encourage high levels of domestic corn production. The economic and foreign policy case for doing away with this business is extremely compelling, so unless there’s some overwhelming public health reason to prefer corn then the case for changing things up is solid irrespective of these health disputes.

Climate Progress

American Farm Bureau’s Rick Krause Lies To Farmers

Rick Krause
Rick Krause

The American Farm Bureau is continuing to lie to farmers about the threat of Clean Air Act regulation of greenhouse gases. The Bureau, the largest lobbying group for American agriculture, denies the threat of global warming of farming, instead fearmongering for years about a mythical “cow tax.” Speaking to members of the Kansas Farm Bureau yesterday, AFB lobbyist Rick Krause claimed the Environmental Protection Agency “will require all farms with more than 25 dairy cows and more than 50 head of beef cattle or 200 head of hogs to get a Clean Air Permit”:

Cap and trade legislation appears to be a dead duck in this year’s Congress, but those tempted to celebrate too early need to be aware of the potential consequences of EPA regulation of greenhouse gases under the Clean Air Act, American Farm Bureau specialist Rick Krause said Monday. Speaking to members of the Kansas Farm Bureau attending this week’s annual County Presidents Tour in Washington, D.C., Krause said EPA regulation will require all farms with more than 25 dairy cows and more than 50 head of beef cattle or 200 head of hogs to get a Clean Air Permit. In addition, it could require permits for the construction of any new outbuildings or remodeling of existing structures, he said. “Right now, the best hope is that Congress will pass legislation to nullify this,” he said.

Krause is quite simply lying.

His “cow tax” lie is based on a figure from the Bush-era US Department of Agriculture, which noted that a 100-ton-per-year threshold of greenhouse gas pollution would cover “even very small agricultural operations” — “dairy facilities with over 25 cows, beef cattle operations of over 50 cattle, swine operations with over 200 hogs, and farms with over 500 acres of corn may need to get a Title V permit.”

The Environmental Protection Agency has no intentions of implementing a 100-ton-per-year threshold. Instead, it has proposed implementing a 25,000-ton threshold, and EPA Administration Jackson has announced that the initial threshold will instead be at least 75,000 tons, and only for power plants until 2013. So even for industrial farms with 6,250 dairy cows, 12,500 beef cattle, 50,000 hogs, or 125,000 acres of corn, the EPA has no plans for enforcement of the Clean Air Act any time soon.

Industrial agriculture is a major source of greenhouse gas pollution, primarily from fertilizers and soil use, cattle flatulence, and manure ponds, generating 6.2% percent of United States emissions in 2008. The US Department of Agriculture has found that by changing practices farmers could instead make American agriculture a net sink for global warming pollution, letting plants soak up carbon dioxide.

Congress has already passed legislation to prevent the enforcement of the Clean Air Act for any livestock production, even from mega-ranches like Smithfield’s 800,000 head feedlot in Colorado. In the 2010 budget resolution passed last year, Congress forbids the issuance of permits for emissions “resulting from biological processes associated with livestock production”:

PROHIBITION ON USE OF FUNDS
SEC. 424. Notwithstanding any other provision of law, none of the funds made available in this Act or any other Act may be used to promulgate or implement any regulation requiring the issuance of permits under title V of the Clean Air Act (42 U.S.C. 7661 et seq.) for carbon dioxide, nitrous oxide, water vapor, or methane emissions resulting from biological processes associated with livestock production.

Furthermore, both the House and Senate versions of climate legislation forbid the EPA from issuing permits for agricultural emissions, instead rewarding farmers with the opportunity to make billions of dollars through voluntary reductions.

Update

Environmental Protection Agency spokesman Brendan Gilfillan responds:

These kinds of doomsday scenarios have no basis in fact and are completely untrue.

Yglesias

Bill Gates, Coca-Cola, and Third World Farmers

Pepsi Throwback 12 Pack - Click to enlarge

Dana Goldstein did an interview with Bill Gates, timed to coincide with the release of his annual letter about his philanthropic activities, and her writeup on the Gates Foundation raises a number of interesting issues. I thought I might focus on this, though:

The world’s richest man, Gates remains a general promoter of the private sector’s good intentions. One of the Gates Foundation’s newest investments is $7.5 million to link 50,000 poor fruit farmers in Uganda and Kenya to Coca-Cola’s supply chain. The goal is to double the farmers’ income by 2014. Chris McDonald, a business ethicist and Coca-Cola expert, has raised questions about whether the plan could leave poor families economically dependent upon the whims of a multinational corporation, but overall McDonald told the Seattle Times, “This clearly seems like a positive thing.”

What always leaves me scratching my head about uber-rich philanthropists is why so many of their activities are so depoliticized. The state plays an enormous role in the economy and in people’s lives—much larger than any foundation ever could—and one of the biggest ways someone with a lot of money can impact the world is by using the money as a lever to move states. Gates, however, generally doesn’t do this outside the field of K-12 education, and even there, as Dana has written, he tends to steer himself toward relatively safe “centrist” ideas about charter schools and teacher pay (ideas of which I approve, to be clear) rather than tackling the hottest political issues.

And this business with farmers and the Coca-Cola supply chain seems like a great example to me. Poor people really need money, which means they need to be connected with people who have money and might give it to them in exchange for work. Which is to say developed world consumers and the corporations who intermediate our interactions with producers. Hence this supply chain idea. But the biggest thing cutting developed world farmers out of the supply chain for Coca-Cola and others isn’t a logistic issue, it’s developed world agricultural policy. In the US, for example, Coke is made with high-fructose corn syrup thanks to barriers to importing sugar and subsidies for the growing of corn. This kind of thing is incredibly difficult to change even though you’d be hard-pressed to find serious policy analysts who think it’s a good idea. It’s incredibly difficult to change because the interest group pressure is all on the side of US corn and sugar producers. But that’s the kind of dynamic the richest man on the planet could conceivably change.

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